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Optimal Group Reports Third Quarter 2004 Results

Thursday 4 November 2004 22:27 CET | News

Optimal Group has reported that revenues for the third quarter ended September 30, 2004 were $31.2 million compared to $2.2 million in the third quarter ended September 30, 2003.

Operating earnings were $3.9 million for the third quarter ended September 30, 2004 compared to a loss of $1.7 million for the corresponding year-earlier period. Optimal defines operating earnings as earnings before stock-based compensation, amortization, foreign exchange and income taxes. Net earnings for the third quarter ended September 30, 2004 was $0.1 million or $0.01 per share, which includes amortization of stock-based compensation of $1.9 million or $0.09 per share. The net loss for the comparable year-earlier period was $2.1 million or $0.14 per share, which did not include any stock-based compensation expense. Effective January 1, 2003, Optimal adopted the fair value-based method to account for stock-based compensation. Excluding the expensing of non-cash stock-based compensation, Optimal’s net earnings for the quarter would be $2.0 million or $0.09 per share. Revenues for the nine-months ended September 30, 2004 were $65.5 million compared to $6.4 million in the nine-months ended September 30, 2003. Operating earnings were $0.8 million for the nine-months ended September 30, 2004 compared to a loss of $4.7 million for the corresponding year-earlier period. Net loss for the nine-months ended September 30, 2004 was $9.7 million or $0.50 per share, which includes amortization of stock-based compensation of $3.8 million or $0.20 per share. The net loss for the comparable year-earlier period was $3.3 million or $0.22 per share. If stock-based compensation was not expensed, Optimal’s net loss for the nine months ended September 30, 2004 would be $5.9 million or $0.30 per share. Optimals financial results include the following transactions, all of which are reflected in the current and comparative financial results: - On July 1, 2004, Optimal acquired National Processing Services LLC, a payments processing company; - On April 8, 2004, Optimal sold its former U-Scan self-checkout business, currently reported as discontinued operations; - On April 6, 2004, Optimal acquired Terra Payments Inc, a payments processing company; - On February 27, 2004, Optimal acquired the depot and field services division of Systech Retail Systems; and - On September 30, 2003, Optimal acquired substantially all of the assets of RBA Inc, a depot and field services company. With the completion of these transactions, the third quarter of 2004 represents the first full quarter of financial results that reflect Optimal’s repositioning as a payments and services company. Balance Sheet Highlights Optimals balance sheet remains strong. At quarter-end, the Company had: - cash and short-term investments net of customer reserves, security deposits and bank indebtedness of $100.1 million; - working capital of $86.6 million; and - shareholders equity of $174.3 million. Outlook Optimal anticipates that its operating earnings for the fourth quarter of 2004 will be in the range of $4.0 million to $4.2 million and that operating earnings for the second half of the year will now be in the range of $7.9 million to $8.1 million. Optimal’s previous guidance for the second half of 2004 was for operating earnings to be in the range of $7.5 million to $8.0 million. Optimal defines operating earnings as earnings before stock-based compensation, amortization, foreign exchange and income taxes.


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Categories: Payments & Commerce | Payments General
Countries: World
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